The Quarterly '98January - MarchFrom SOLIDERE |
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The Quarterly '98January - MarchFrom SOLIDERE |
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THE QUARTERLY
January - March 1998 A SOLIDERE PUBLICATION
United nations secretary General Kofi Annan unveils the plaque that will adorn the entrance of UN House in the BCD, headquarters of the economic commission for western Asia (ESCWA). Delivered in November 1997 after a record construction period of 14 months, the building was depicted by the secretary general as «setting an example for other United Nations offices around the world». In his inauguration speed on march 20, 1998, Annan said: «Today, 25 years after it was first established in this city, ESCWA has come home. I have every faith this will be the permanent headquarters it is intended to be.» He described the UN agency’s return to Beirut as «a symbol of the peace, stability and peaceful coexistence » that have come back to Lebanon, and won the hearts of all when be concluded with a phrase in Arabic, saying: «I am Beiruti».
«An imposing edifice that incorporates the latest technical innovations yet is in perfect harmony with its surroundings, preserving and respecting the area’s character and heritage».
This was the description given by ESCWA Executive Secretary Hazem EL-Beblawi of UN House at its official opening by general Secretary Kofi Annan.
EL-Beblawi reiterated on this occasion his faith in the reninal of Beirut, saying: «Lebanon has made the restoration of the international and regional prestige of Beirut one of its reconstruction priorities, so that the city may become once again the capital of the Middle East and the jewel of the Mediterranean».
Upon taking delivery of the building in November 1997, EL-Beblawi had stressed that the decision to have the headquarters of ESCWA in Beirut was «a recognition by member states of the United Nations General Assembly of the central role of this city». «this, he added, is a message to the world that this vigorous city is back.
Life is returning to the area neighboring UN House as progress in the works becomes palpable.
The restored Grand Serail is close to delivery, with the return of the Prime Minister’s and council of Minister’s offices reestablishing the BCD as the center of government life.
Landscaping of the areas in Ghalghoul and under the serail, in addition to the delivered Roman Baths, will offer visitors a restful and pleasant space.
Adjacent to UN House, the National Evangelical Church is one of 20 religious monuments that adorn the BCD, reflecting the spiritual values of Beirut as a meeting place of the three monotheistic faiths.
After a 23-years closure, the chapel was officially inaugurated on Sunday March 29, under the patronage of President of the republic Elias Hraoui. This event was also a celebration of the 150th anniversary of the church. Having suffered extensive damage during the war, the new chapel is a faithful reconstitution of the original structure, while the 1835 clock tower has been cleaned and repaired.
On this occasion, a number of events including lectures and a piano concert took place in the building neighboring the church, where the National School of Music is also situated.
The Ghalghoul garden
the 6,000 s.q.m. garden will lie the Ghalghoul interchange and UN House, works started in March, following approval of the landscape design concept.
The concept by Mohammad Halawi features two circular spaces and a water fountain surrounded by trees. A viewing platform at the southern and of the square will look out onto the garden and the Un House building beyond.
Once completed by year end, the garden, together with the Roman baths, will constitute previews of the quality open space being delivered by the company.
Chairman Letter
SOLIDERE continued in 1997 on its confident course towards rebuilding the Beirut Central district into a vibrant city center destined to propel Beirut into its regional dimension in the 21st century, this optimism was shared by investors and buyers/developers. Our ambitions sales targets were met, despite the cancellation of some major contracts in the wake of the Asian financial crisis, and sales in 1998 promise to be equally strong.
The scope and quality of SOLIDERE’s role in realizing its bold urban renewal project, were confirmed by tangible achievements in land and real estate development. Already finalized in the historic core, infrastructure in the traditional BCD is set to be completed in august 1998, well ahead of schedule.
Progress in landfill treatment and reclamation led to the initiation of infrastructure works on the original landfill. A master plan was completed for the hotel district and serail corridor, both important elements in the BCD extension towards the new seafront. All this laving the foundations for real estate developments and securing further investment by developers.
A very positive international investor view of the shares can be inferred from the current research valuations, based on company fundamentals as compared to other companies in the world. Both the research reports and our own experience, from meetings with many international investors who have visited the company, suggest strong potential demand for the shares.
With the final touches on infrastructure, a functioning city center will emerge by year end, a source of pride and excitement to all. The BCD is thus becoming a much sought after location for business, residence and leisure. Large scale quality developments are being planned, leading us to believe that the prospects for 1998 are excellent.
Nasser Chammaa
Chairman and General Manager
March 23, 1998
The board of directors of SOLIDERE approved the 1997 audited financial statements on February 2, 1998. The company’s financial results at year end show a profit of US$ 77.8 million, 32.1% above 1996. In addition to a US$74.3 million net revenues from sales and rentals, net revenues generated by the company’s cash investments totaled US$24.9 million. The financial strength of the company is also evidenced in the balance sheet as at 31.12.97 by a cash position of US$230 million and US$215 million in the form of receivables, of which US$181 million are promissory notes relating to sale transactions. The sales revenues of US$144 million represented a 55.8% increase over 1996.
1997 annual report
SOLIDERE’s annual report will be released in April.
1998 investment research
In January 1998, Salomon Smith Barney included SOLIDERE as one of their European top picks for 1998, thus highlighting the company as one of 24 major corporations across all sectors.
In March 1998, after the publication of the 1997 results, Salomon Smith Barney reiterated their earlier «Outperform» rating on the SOLIDERE shares, with a «promising outlook for 1998».
On the other hand, Merrill Lynch raised their short-term rating on the shares to «Accumulate» from «Neutral».
Performance of the shares during the Ist quarter
SOLIDERE shares fluctuated during the quarter between a low of US$11.25 and a high of US$13.125, as most investors were waiting for the audited financial results for the year 1997. Both shares were effectively boosted from their lows of the quarter after the results were published. Share A closed at US$12.125 and share B at US$12.50, respectively 3.96% and 5.66% lower than be previous quarter closing prices.
SOLIDERE relocates to Foch-Allemby
The relocation early in March of all SOLIDERE offices to restored buildings in Foch-Allemby heralds the return of activity to this conservation area and its renaissance as a prime business district.
the Foch-Allemby buildings will form an alignment of beautiful façades with traditional architectural design and features in partly pedestrian streets. Behind these façades the buildings are equipped with the lasted in modern amenities and have been upgraded to comply with international safety standards.
The new SOLIDERE offices feature open-plan designs that make more effective use of space and encourage teamwork and communication; high-quality flexible partitioning systems especially designed to suit company needs are used in certain areas to increase privacy without hindering teamwork.
Street and sidewalk finishing in Foch-Allemby and grain sidewalks awarded to A.R. Hourieh. Works are expected to be completed by year end. Traditional paving consisting of recycled basalt tiles reminiscent of 1930s Beirut will be used for pedestrian streets with granite for the sidewalks while new basalt tiles will be installed in vehicular streets.
Foch-Allemby coming to life
Apart from the building it has reserved for its own use, SOLIDERE is restoring a number of properties or sections thereof in Foch-Allemby for the purpose of leasing them or as part of turnkey sale operations. A number of developers and/or end-users are also active in the Foch-Allemby region, through property purchase or recuperation.
Among public and religious buildings, the restoration of Al Dabbagha Mosque dating back to 1932 is close to completion. The former Beirut Municipality, also built in 1932 in a French colonial neo-Ottoman style, constitutes another important landmark, the council of Ministers has entrusted the executive Council for Grand projects of Beirut City with its restoration. With the finalization of design and tender documents, the project of the bids for construction.
Riad El Solh Street operation
Riad El-Solh Street is being revitalized as an important financial artery, with six major banks currently operating and nine others under restoration or construction, in addition to several banks close by, on Riad El Solh Square and in maarad street.
New construction
SOLIDERE has started implementing several projects targeted for delivery by end 1999. By far the largest is the reconstruction and development of the Souks which provides 1000.000 s.q.m. of retail, leisure, residential and office space, together with cafes, restaurants and food courts, and a 2.500-car park. The Saifi complex, with a floor area of 35.000 s.q.m., will revitalize this traditional residential area whilst encouraging the development of a promising real estate and rental market. Finally, the delivery of 70.000 s.q.m. of administrative buildings will complement the Serail building and consecrate the BCD as the center of government activity.
Souks
While works are proceeding in the south parking, SOLIDERE has launched the tender for the construction of the north parking, the department store and the neighboring multi-use building as well as the leisure complex. The contract award and beginning of works are expected in Summer 1998.
Ongoing discussions with anchor tenants and operators for the department store, supermarket, and gold souks are quite promising and SOLIDERE hopes to announce some agreements in the summer.
Administrative office buildings
Work is progressing on schedule for the delivery in 1999 of several office buildings for the use of agencies affiliated to the Council of Ministers as well as the Finance and Interior ministries. Excavations, site clearing and shoring are moving at a rapid pace thereby preparing for the erection of three new buildings on the Serail hill. SOLIDERE is awaiting the receipt of contractors bids on two of these projects and expects to launch the tendering of the third by the end of April 1998.
Saifi housing
The construction of 16 residential buildings in the Saifi area started in March, following the contract award to Mouawad Edde sarl. Slated for delivery at end 1999, the complex will comprise 145 units, offering a choice of 2,3, and4 bedroomflats ranging in size between 145 and 300 s.q..m., conveniently located at the south-eastern corner of the BCD, between George Haddad Street and Debbas Square.
The elegant design of these modern buildings draws on traditional architectural features and is complemented by an attractive landscaping within the complex and in the entire Saifi residential district.
SOLIDERE is laying the final touches on its rental policy for the project prior to launching the marketing in the summer.
Land Development
Marine Works
The demolition of the former «Bain Français» was completed and works began on the St George jetty, as part of the sea defense.
The «molding» of «accropodes» for the first line of defense is proceeding and Bouygues is building on site the plant for the production of caissons for the second line.
The roads and landscaping of the area under the Serail are being finalized, This is to be combined with the Roman Baths, of which the second phase will follow the conclusion of archeological excavations in the southern part of the baths. Other squares are under design near the Great Omari Mosque and on Weygand Street, while the landscaping of the open spaces on and below the ring road are to be commissioned.
A study that will detail the master plan for the waterfront lands consisting of the reclaimed land and the new Corniche alongside the northern edges of the BCD, was awarded in March to three US firms. Skidmore Owings & Merril (New York) will be in charge of urban planning Sasaki (Boston) of landscaping and parsons Brinckenhoff (New York) of traffic. The six month study will propose a landscaping concept for the new Corniche and prepare guidelines for the waterfront park.
and SOLIDERE is confident that its 1998 target sales revenues will be met well before the year’s end. The following agreements were signed during the first quarter.
- Investment and Development Bank for a restored building to serve as the bank headquarters in Lebanon.
- Lebanon invest s.a.l. for a plot of land which will be turned into a 30.000sp.m. office building.
- The Robert Mouawad Group for four buildings to be restored and used for their commercial activities.
- 1330 Park Avenue Co. for a plot of land to be developed into a commercial and residential building.
- Two Park Avenue s.a.l comprising and investment groups of MAC, Al Seif Engineers and Mohammad Safadi, for a 15.000 sp.m. plot of land to be developed into a commercial complex.
- Chiha Group for one of the oldest buildings in the BCD to be restored and used as the group headquarters.
- The contracting company CCC for additional land for an extension to their projected headquarters building to 14.000 s.q..m.
- The contracting firm AbdelRahman Hourieh for two buildings to be developed as office space.
Continuing to enjoy regional and international recognition as a model in urban planning and reconstruction, the Beirut Central District is one of 73 projects chosen for Expo 2000, to be held in Hanover (Germany).
The exhibition will concentrate on the themes of humankind, nature and technology.
The projects were selected for their ability to «generate sustainable benefits to their localities far beyond the 2000» through practical initiatives for coping with global challenges.
At the registration ceremony hosted by Federal Republic of Germany Ambassador Pete Witting, company Chairman and General Manager Nasser Chamaa described the nomination as a national pride.
The BCD continues to elicit substantial interest among the international, regional and local public.
The expending flow of prominent BCD visitors included in the first quarter of 1998 included Russian Minister of Commerce Nicolai Svestovoe, Hungarian Minister of finance Peter Medggyesse, Mrs. Federico Mayor, wife of UNESCO general Director, as well as important official delegations from a number of countries, in addition to several international bankers, investors and media representatives.
A book published in valode and pistre devotes four pages to the BCD Souks project. The French architectural firm, in partnership with Annabel Karim Kassar, has designed the entertainment complex which will include a movie multiplex and related facilities and a space theater with three-dimensional and dome technology.
The harvard University Graduate School of Design is releasing the CDRom of its conference, co-sponsored by SOLIDERE, on the reconstruction of Beirut held in 1997.
Together with a review of its history in the last two centuries, the CDRom gives an architectural tour of Beirut and dwells on the major architects who have left their mark on the city.
For more information Email : Solidere@Lebanon.com
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